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GM cuts jobs in response to present costs, future innovation

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GM cuts jobs in response to present costs future innovation

DETROIT (AP) — Even though unemployment is low, the economy is growing and U.S. auto sales are near historic highs, General Motors is cutting thousands of jobs in a major restructuring aimed at generating cash to spend on innovation.

It’s the new reality for automakers that are faced with the present cost of designing gas-powered cars and trucks that appeal to buyers now while at the same time preparing for a future world of electric and autonomous vehicles.

GM announced Monday that it will cut as many as 14,000 workers in North America and put five plants up for possible closure as it abandons many of its car models and restructures to focus more on autonomous and electric vehicles.

CEO Mary Barra said as cars and trucks become more complex, GM will need more computer coders but fewer engineers who work on internal combustion engines.

“The vehicle has become much more software-oriented” with millions of lines of code, she said. “We still need many technical resources in the company.”

The reductions could amount to as much as 8 percent of GM’s global workforce of 180,000 employees.

The restructuring also reflects changing North American auto markets as manufacturers continue to shift away from cars toward SUVs and trucks. In October, almost 65 percent of new vehicles sold in the U.S. were trucks or SUVs. That figure was about 50 percent cars just five years ago.

GM is shedding cars largely because it doesn’t make money on them, Citi analyst Itay Michaeli wrote in a note to investors.

“We estimate sedans operate at a significant loss, hence the need for classic restructuring,” he wrote.

The reduction includes about 8,000 white-collar employees, or 15 percent of GM’s North American white-collar workforce. Some will take buyouts while others will be laid off.

At the factories, around 3,300 blue-collar workers could lose jobs in the U.S. and another 2,600 in Canada, but some U.S. workers could transfer to truck or SUV factories that are increasing production. The cuts mark GM’s first major downsizing since shedding thousands of jobs in the Great Recession.

The company also said it will stop operating two additional factories outside North America by the end of next year.

The move to make GM get leaner before the next downturn likely will be followed by Ford Motor Co., which also has struggled to keep one foot in the present and another in an ambiguous future of new mobility. Ford has been slower to react, but says it will lay off an unspecified number of white-collar workers as it exits much of the car market in favor of trucks and SUVs, some of them powered by batteries.

The GM layoffs come amid the backdrop of a trade wars between the U.S., China and Europe that likely will lead to higher prices for imported vehicles and those exported from the U.S. Barra said the company faces challenges from tariffs but she did not directly link the layoffs to them.

GM doesn’t foresee an economic downturn and is making the cuts “to get in front of it while the company is strong and while the economy is strong,” Barra told reporters.

Factories that could be closed include assembly plants in Detroit and Oshawa, Ontario, and Lordstown, Ohio, as well as transmission plants in Warren, Michigan, and near Baltimore.

The announcement worried GM workers who could lose their jobs.

“I don’t know how I’m going to feed my family,” Matt Smith, a worker at the Ontario factory, said Monday outside the plant’s south gate, where workers blocked trucks from entering or leaving. “It’s hard. It’s horrible.” Smith’s wife also works at the plant. The couple has an 11-month-old at home.

Workers at the Ontario plant walked off the job Monday but were expected to return Tuesday.

After the morning announcement, Barra headed for Washington to speak with White House economic adviser Larry Kudlow in what was described as a previously scheduled meeting.

President Donald Trump, who has made bringing back auto jobs a big part of his appeal to Ohio and other Great Lakes states that are crucial to his re-election, said his administration and lawmakers are exerting “a lot of pressure” on GM.

Trump said he was being tough on Barra, telling the company that the U.S. has done a lot for GM and that if its cars aren’t selling, the company needs to produce ones that will.

At a rally near GM’s Lordstown, Ohio, plant last summer, Trump told people not to sell their homes because the jobs are “all coming back.”

Most of the factories to be affected by GM’s restructuring build cars that will not be sold in the U.S. after next year. They could close or they could get different vehicles to build. Their futures will be part of contract talks with the United Auto Workers union next year.

The Detroit-based union has already condemned GM’s actions and threatened to fight them “through every legal, contractual and collective bargaining avenue open to our membership.”

Bobbi Marsh, who has worked assembling the Chevrolet Cruze compact car at the Ohio plant since 2008, said she can’t understand why the factory might close given the strong economy.

“I can’t believe our president would allow this to happen,” she said Monday. Democratic Sen. Sherrod Brown said the move will be disastrous for the region around Youngstown, Ohio, east of Cleveland, where GM is one of the area’s few remaining industrial anchors.

“GM received record tax breaks as a result of the GOP’s tax bill last year, and has eliminated jobs instead of using that tax windfall to invest in American workers,” he said in a statement.

GM, the nation’s largest automaker, will stop producing cars and transmissions at the plants through 2019. In all, six car models were scrapped, leaving the company with nine remaining car models for its four brands, Buick, Cadillac, Chevrolet and GMC.

Among the cars that won’t be made after next year is the Chevrolet Volt rechargeable gas-electric hybrid. When introduced a decade ago, the Volt was meant to be a bridge to fully electric cars, the company said. It has a small battery that can take it about 50 miles, then it switches to a small gasoline engine.

But since it was introduced, battery technology has improved dramatically, GM said. Now the full-electric Chevrolet Bolt can go up to 238 miles on a single charge.

The United Auto Workers promised to fight any plant closures and criticized GM for cutting U.S. jobs while building full-size pickups in Mexico. It also recently announced that a new Chevrolet Blazer SUV will be built there. Also, GM imports the Buick Envision midsize SUV from China.

___

Associated Press writers Rob Gillies in Toronto, John Seewer in Toledo, Ohio, and Zeke Miller in Washington contributed to this report.

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Democrats

Veronique de Rugy: Green New Deal would be hundreds of TRILLIONS of dollars in federal commitment

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Veronique de Rugy Green New Deal would be hundreds of TRILLIONS of dollars in federal commitment

If there’s a word that’s not necessarily negative one could use to describe the Green New Deal, it would be “ambitious.” The deal has so much wrapped into it that it’s hard to tell which components are designed to save the environment and which ones are intended to destroy the economy.

Estimates put costs for the “green side” of the resolution at somewhere between $12-$20 trillion. Then, there’s the Medicare-for-All component that is estimated at $32 trillion over a decade.

And that’s just the start.

This isn’t just a “green” deal. It’s a hodgepodge of policy proposals that include massively growing the welfare state, inserting government even more into the job markets, and a universal basic income that they refuse to actually call a universal basic income. The much-maligned FAQ that was posted and quickly removed from the website of sponsor Alexandria Ocasio-Cortez (D-NY) mentioned paying people who were unable or even “unwilling” to work.

“Even in the best case scenario where you substitute a UBI for all the other forms of welfare, it’s insane,” said Veronique de Rugy, Senior Research Fellow at the Mercatus Center at George Mason University, on ReasonTV.

But here’s the problem. The Green New Deal doesn’t substitute a universal basic income for other welfare programs. In the Green New Deal, the programs recommended are supposed to be additions, not substitutions.

“It’s a really hard system to support even in its ideal form,” de Rugy continued. “Then there’s this Green New Deal version which doesn’t even seem to entertain this notion of actually substituting for all the rest, so it’s on top of what we have now.”

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The real question we need to ask is whether or not the Democratic Party is actually going to support this. In its current form, the Green New Deal is a fantasy, and perhaps that’s what the more-sane Democrats are shooting for by supporting it. By giving it their attention now, they can work their way down to more reasonable proposals for everything from environmental protection to job creation programs to different versions of socialism.

In other words, they may be using the hyper-leftism of the Green New Deal as a gateway to get to the palatable leftism of what’s quickly becoming mainstream socialism.

The Green New Deal shouldn’t scare conservatives because it can’t happen. What should concern us is the end result negotiated down from this starting point. Given the GOP’s negotiating track record lately, we don’t know what we’re going to get when the Green New Deal is trimmed down to reality.

 


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Democrats

Even Drudge can’t deny the insane spending by Washington DC today

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Even Drudge cant deny the insane spending by Washington DC today

What did GOP control of the House, Senate, and White House do to spending and the national debt? Did Republicans demonstrate the fiscal responsibility that has been one of their alleged traits for decades? Did they match the spending under Presidents Bush and Obama, maintaining the status quo? No, and no. They looked at the spending and debt accumulation of the past and said, “Hold my beer.”

It’s not just the Republicans’ fault, but asking Democrats to stop them when they’re on a spending spree is like asking a bartender to stop serving alcohol. It just doesn’t feel right to them and the results of bipartisanship have been quite apparent, as my friend Daniel Horowitz noted on Conservative Review:

The bipartisan spending binge is now worse than under Bush and Obama

https://www.conservativereview.com/news/bipartisan-spending-binge-now-worse-bush-obama/It feels like it was yesterday when I was watching the news as a kid with my parents in 1995, listening to Newt Gingrich, during the infamous shutdown fight, warn about the dire consequences of crossing the $5 trillion debt milestone. It feels like it was yesterday when I was writing press releases for candidates in “the year of the Tea Party” on how Obama and the Pelosi Congress took the debt to $14 trillion in such a short period of time. Now, over eight years into varying degrees of GOP control of Congress and the White House, we have crossed the $22 trillion mark, expanding the debt more rapidly than at any time in our history. Whereas the debt exploded by $5 trillion during Bush’s eight-year tenure, a shocking figure at the time, it has now increased $8 trillion just since Republicans controlled the House in 2011 and by $4 trillion over the past four years, since they controlled at least two of the three political organs of government.

It has become so bad that even Matt Drudge, whose conservative news aggregator Drudge Report has been consistently defending President Trump since well before the 2016 election, is starting to ask questions.

Drudge Spending Binge

Washington DC has had a spending problem for a century. Republicans run on solving this problem during election time, but they’re acting like Democrats between elections. It’s time to let them know we’re watching and we’re not happy about it.

 


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Economy

Trump administration is optimistic about failing economic policies

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Trump administration is optimistic about failing economic policies

In an article I wrote last week following Trump’s campaign rally disguised as a State of the Union Address, I documented how his claim that his trade war and tax cuts had produced “the hottest economy in the world” were merely the rhetorical ramblings of a failed “Republican” running for re-election.

Trump’s trade war has created an economic hell that will take years to recover from, and his tax cuts have failed to provide tax relief for the middle class. In addition, when you throw Trump’s big-government spending into the mix, the federal deficit now exceeds $22 trillion.

The stock market fell late in 2018 and all gains made in the year were wiped out, a crash the administration blamed on Democrats and Fed Chairman Jerome Powell.

While the slide on Wall Street was dismissed as a market correction, recently released economic data from the Commerce Department shows that the overall economy ended the year much worse than the White House would have you believe.

U.S. retail sales recorded their biggest drop in more than nine years in December of 2018 as receipts fell 1.2 percent across the board. This is the largest decline in retail sales since Sept. 2009 when the economy was in a recession.

Trump brags about low unemployment numbers, but according to a Department of Labor report released yesterday, unemployment claims increased by 4,000 to a seasonally adjusted 239,000 for the week ending Feb. 9th.

While it’s tempting for some to dismiss yesterday’s report as an anomaly, let’s take a look at the data from another angle.

The four-week moving average of claims — considered a better measure of labor market trends because it irons out week-to-week volatility — was 231,750, an increase of 6,750 from the previous week’s revised average. This is the highest level for this average since January 27, 2018 when it was 234,000. The previous week’s average was revised up by 250 from 224,750 to 225,000.

Of course, the administration famous for identifying unfavorable news as “fake” went right to work trying to spin these economic failures into policy victories.

Saying that he was still “optimistic” about the economy, White House Economic Advisor Larry Kudlow called the retail sales number a “glitch,” and he invited the feds to “step aside” while praising the president for “ending the war on business.” He then parroted SOTU talking points about how the overall economy was “very strong” despite these recent reports.

There are those who label me a pessimist because I refuse to whitewash the political graffiti of optimism Trump and the GOP spray paint on their crumbling wall of lies and broken promises, but in the words of C. Joybell C.: “Some people are optimists. Some people are pessimists. I’m just a realist who believes that some things are worth fighting for.”

Originally posted on StridentConservative.com.

 


David Leach is the owner of The Strident Conservative. His daily radio commentary is distributed by the Salem Radio Network and is heard on stations across America.

Follow the Strident Conservative on Twitter and Facebook.

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